Question

I keep coming up with 111.36???

Quality Chairs Inc. (QC) manufactures chairs for industrial use. Laura Winters, the Vice President for Marketing at QC, concluded from market analysis that sales were dwindling for QC's standard three-foot chair due to aggressive pricing by competitors. QC's chairs sold for $890 whereas the competition's comparable chair was selling for $750. Winters determined that a price drop to $750 would be necessary to regain market share and reach a targeted annual sales level of 10,000 chairs. Cost data based on sales of 10,000 chairs: Direct materials (board feet) Direct labor (hours) Machine hours (hours) Finishing and packing (hours) Budgeted Quantity 89,700 72,200 12,250 7,350 Actual Quantity 81,200 74,625 12,100 7,250 Actual Cost $1,258,500 876,700 251,700 126,700 If the profit per unit is maintained, the target cost per unit is:

choices are:

22

112

122

217

167

I get 638.64 for-profit per unit. Selling price-cost per unit

Answer 1

Budgeted sales revenue	$          89,00,000
(10000*890)
Less:
Direct Materials ($1258500/81200*89700)	$          13,90,240
Direct Labor (876700/74625*72200)	$            8,48,211
Machine Cost ($251700/12100*12250)	$            2,54,820
Finishing and pack ($126700/7250*7350)	$            1,28,448
Profit	$          62,78,282
Profit Per unit($6278282/10000)	$                      628
Target price	$                      750
Therefore target cost per unit ($750-627.83)	$                      122
Therefore correct option : THIRD